FOUNDATIONS AND FUNDRAISING Q & A

[Questions from CCFC Issues Committee – Responses from CCFC Issues Committee Legal Advisor, Steve Lucas with Nielsen, Merksamer, Parrinello, Mueller & Naylor, LLP]

Q. Some of the districts I’m working with want to run everything through their foundation and send a single check to CCFC–Issues Committee.  As I understand it that will work provided they stay within the parameters of what they are permitted to do on a percentage basis of their foundation revenues.

A.  No, unfortunately that would not work, as that would turn the foundation into a political committee with its own extensive reporting requirements.  The foundations should NOT be fundraising into their foundation accounts for purposes of supporting the bond measure.  Foundations may use their own funds, raised for general or other, non-campaign purposes, to make a contribution to CCFC Issues Committee.  Under a very technical interpretation of FPPC rules, they may make such a contribution from general foundation funds to a ballot measure committee (such as CCFC Issues) only once every four years.  Having said that, historically foundations have been fairly routinely much more active and the FPPC apparently disregards it, as long as the foundation IS NOT specifically fundraising for ballot measure activity/support.

Q. I further understand that if contributions are made to foundations that they are tax deductible.

A.  No, not if contributions are made to the foundation for the purpose of sending the money on to a ballot measure committee.

Q. In the past some people have wanted me to acknowledge their gifts to local foundations as contributions to a Bond Campaign effort.   In these cases I’ve told them that they can have the tax deduction or the recognition, but not both.

A.  You should not do this.  See above.  

Q. Also, you indicated that $1,000+ donations received within 90 days of the election need to be reported within 24 hours of receipt.  If that is so, it looks like that will be anything received after August 8^th or 9^th.

A. [Steve Lucas] Correct.   

Q. Several of our events will likely fall after that date, which brings up the question of “within 24 hours of receipt by whom?”  Is it when it comes to my office? 

A. [Steve Lucas] Yes.  

Q. To a foundation? 

A. [Steve Lucas] Please don't have the foundations raise the funds into their accounts.  

Q. To a district auxiliary that is handling the check collection?

A. [Steve Lucas] If that is a public office, you don't want to do that. 

Q. Do you have any thoughts or legal points of which I need to be apprised before we get in a bind as we proceed down this road?

A. [Steve Lucas] See Above. 

Q. Some of districts are inquiring whether public facilities can be leased for an event.  They indicate that the law allows use (Civic Center Act?) of facilities upon charge of a fee.  Can this be done for these fundraising events?  Another district indicates that they have a State Park facility in their area that is leased out for all kinds of events by private parties.  Is this an option for that district?

A. Yes, as long as leased at fair market value.

For more information, contact Paul Holmes or Shannon Mahoney.

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